Traditional real estate transactions often involve one or more agents (i.e., Real Estate Agents, Real Estate Broker, Real Estate Salesperson, Real Estate Associate Broker) tasked with representing the parties to the real estate transaction. For example, a seller may be represented by a seller agent, also known as a listing agent, and a buyer may be represented by a buyer agent.
In a traditional real estate transaction, the listing agent may list the property on a multiple listing service (“MLS”), advertise the listing, and the like. The responsibilities of the buyer agent include gaining access to the property the buyer wishes to view, relaying information regarding the property, and monitoring the state of the property as the buyer views it. Once a buyer indicates an interest in purchasing the property, the buyer and seller may enter into a negotiation that is intermediated by the listing agent and/or the buyer agent and results in a transfer of property from the seller to the buyer.
For their services, both the listing agent and the buyer's agent may each receive about 3% of the value of the property. Typically the fees paid to the buyer's agent and the seller's agent are both paid by the seller, and/or incorporated into the selling price.
Many problems are associated with a real estate transaction model that involves the use of seller and buyer agents. These problems include, for example, the financial burden placed on the seller, who typically pays about 6% of the value of the property (e.g., 3% to each of the buyer and seller agents) and typically does not receive as many services from the agent(s) as the buyer. Other problems faced by agents include conflict between contractual obligations and receiving financial compensation for their services. For example, a seller's agent may not have a contractual obligation for compliance, negotiation and closing services related to completion of the real estate transaction, as their primary obligation is to represent a seller's wishes. However, the primary loyalty of the seller's agent may remain with the real estate transaction, as they will only receive commission when the real estate transaction is completed.
Furthermore, the total time for the real estate transaction to be completed is also exacerbated by the delays caused by the use of multiple agents. For example, during a negotiation, a traditional real estate transaction precludes direct contract between the buyer and the seller. Instead, information is relayed via agents, in a manner that is inherently inefficient and may result in the miscommunication of information. Additionally, as viewing a real estate property may require establishing a time when the seller will not be present, and the listing and buyer agents and buyer will be present, it may require some time to schedule a viewing. In addition, agents typically accompany prospective buyers through a property, for example, to guard against pilfering and breakage. Prospective buyers, however, may obtain more consideration of a property without an agent's monitoring. Also, buyers may prefer to view a property without an agent. Thus, the agent may be counterproductive to the prospective buyer's property selection process. Additional delays are often due to real estate properties, in accordance with traditional techniques, being initially listed at inappropriate prices, which leads to greater delays in receiving offers, and more time spent in negotiating an appropriate price. This is due in part to a subjective pricing model commonly utilized in traditional real estate transactions. In particular, a seller's agent may first discover how much a seller expects a property to sell for, add a percentage (e.g., six percent), and then produce “comparable” sales that support that price, rather than objectively pricing the property based on similar properties available or recently sold in the market, as would be done in an objective comparative market analysis.
Furthermore, although it is estimated that about 90% of buyers initiate real estate transactions online by review real estate offerings using the internet prior to engaging a buyer agent, real estate transactions are typically processed and finalized using agents in the manner described above. Accordingly, there remains a need for electronic management of one or more of the steps described above in an effort to promote efficiency, reduce costs, and the like. Optionally, the electronic management may eliminate the need for one or more agents typically involved in the real estate transaction (e.g., seller agent, buyer agent). In such an embodiment, one or more parties to the real estate transaction may no longer be required to pay a commission.
There has been a long-felt but unsolved need to solve the problems and disadvantages of transacting real estate through an agent-driven process. The systems and methods of the present disclosure provide solutions to the problems and disadvantages discussed above.